Co-Pricing: Co-Creating Customer Value Through Dynamic Value Propositions

Abstract

Using co-pricing as a means for gaining deep customer insights offers much potential, ultimately expanding profitability and markets. Models of co-pricing could provide new basis for segmenting customers, based on their perceptions of value. Involvement in co-pricing decisions can also offer opportunities for enhancing relationships, building trust, fairness and commitment between a supplier and customer. A firm can develop value propositions and use them as part of a dynamic learning process that occurs between customer and supplier. Customer segments can be determined based on value perceptions, with each requiring discrete value propositions that are designed around relationship goals. Breakthrough opportunities relating to the special challenges of digital services are highlighted.

Keywords: co-creation, co-pricing, value, value propositions, dynamic, pricing, pay what you want, digital products, segmentation, relationship marketing, customer relationship, fairness, FairPay

JEL Classification: D40, D46, D51, D61, D64, L14, L82, M31